Before the advent of NFTs, the chart below is a good representation of the periodic patterns that emerged in the crypto space.
Fiat currencies primarily flow into Bitcoin and large-cap altcoins, then move into mid-cap altcoins, and finally into low-cap altcoins (also known as “junkcoins”).
There have been some changes over the past two years, and the emergence of NFTs as a digital asset class fits the above cycle.
Among them, NFT, especially picture proof (PFP), is the combination of identity solution, club and fungible token. The NFT market is also differentiated in terms of market value, among which Boreed Ape Yacht Club (BAYC) and Azuki are large-cap stocks, Mfer’s, Nakamigo’s, and Milady are mid-cap stocks, and the rest are basically small-cap stocks. Finally, there’s the memecoin combo – which serves little purpose other than spreading the word and creating fun on social media.
Can fun + meme be a digital asset now? that’s right. This can be seen considering that DOGE, SHIB and now PEPE reached a market cap of $150 million in a matter of days. The Milady Maker PFP community is said to be behind the PEPE memecoin.
The memecoin gained traction after the Nakamigos and BAYC communities stagnated and large numbers of holders left. Plus retail boredom has given way to memecoin season! Spent a few days last week with PEPE and others we really don’t want to talk about because it’s unlikely to be a long-term favorite. But who knows?
With the launch of the memecoin meta, Milady Maker’s PFP holdings have increased over the past week.
These new digital assets are taking us by surprise right now, but they can also leave us in pain at times. What is certain, however, is that as the large-cap cryptocurrencies rallied, they also rose faster, sucking liquidity out of the mid-cap. When they stop growing, capitals go back to mid-range types. This cash flow pattern can appear across all asset classes (NFTs, fungible tokens) and portfolios (PFP, Game-FI, fungible tokens, and utility NFTs), making the Web3 scene look very confusing.
As dizzying amounts of traffic and liquidity create uncertainty for even the most experienced traders, it’s clear that new paradigms are emerging in the world of NFTs and memecoins.
Note that the observations presented in this article are not intended as financial advice, but rather as insights from individuals interested in identifying trends and patterns, like many others.
- NFT market users and sales decline, hit 2021 lows
- Ordinal inscriptions on the Bitcoin blockchain have passed the 1 million mark
According to Forkast